Elon Musk drops out of $200 billion club as Tesla shares plummet

The billionaire shed $18 billion from his net worth on Thursday after the electric vehicle maker's stock plunged 12%

Tesla chief executive Elon Musk remains the world's richest person with a personal fortune of $198 billion. Reuters
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Elon Musk shed $18 billion from his net worth on Thursday and has dropped out of the exclusive $200 billion club after shares in electric car maker Tesla plummeted 12 per cent on the back of the car maker's warning that sales would decelerate this year.

Mr Musk, chief executive of Tesla, however, remains the world's richest person with a personal fortune of $198 billion, the Bloomberg Billionaires Index showed.

Tesla’s stock suffered its sharpest intraday percentage loss in more than a year, with $80 billion of its market value wiped out on Thursday.

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That pushed its market capitalisation loss for the month to about $210 billion, Reuters reported.

Most of Mr Musk’s fortune is tied to Tesla's stock, which surged 129.8 per cent last year to end 2023’s final day of trading at $248.48. On Thursday, it closed the trading day at $182.63.

The billionaire owns about 13 per cent of Tesla stock after selling billions of dollars of the company’s shares in 2022 to help finance his Twitter acquisition.

Tesla’s stock price is a long way off its November 2021 peak of $407.36 – a time when Mr Musk’s net worth also hit its highest value of $338 billion, making him the world’s first member of the $300 billion club, albeit briefly.

The world’s largest car company in terms of market capitalisation is part of the “Magnificent Seven”, a group of mega-cap US technology companies that includes Apple, Microsoft, Alphabet, Amazon, Nvidia and Meta Platforms, which has driven stock markets higher and accounted for the majority of the S&P 500’s returns last year.

While posting fourth-quarter earnings on Wednesday, the electric vehicle maker warned of a significant deceleration in vehicle sales growth for the current year.

“In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023” as it works towards launching its “next-generation vehicle” in Texas, Mr Musk said.

The Texas-based company sold 484,507 vehicles in the October-December period, an annual increase of about 20 per cent.

Despite better-than-expected deliveries, the company lost its crown as the world’s largest EV seller to China's BYD, which sold 526,409 vehicles.

The EV industry has been grappling with a slowdown in demand for more than a year.

Price cuts at Tesla have already hurt margins at the world’s most valuable car maker.

The company reported a 115 per cent jump in fourth-quarter net profit of more than $7.9 billion, compared with $3.7 billion in the same period in 2022. It was the company’s 18th straight profitable quarter.

Over the past year, Mr Musk added $92 billion, or 67.2 per cent, to his personal fortune despite the continuing controversies related to his $44 billion acquisition of Twitter, now known as X, in 2022.

The top five list of the wealthiest people in the world remains relatively unchanged, with Amazon founder Jeff Bezos retaining the second spot with a net worth of $183 billion, followed by Bernard Arnault, chairman of French luxury group LVMH, with $164 billion.

Microsoft founder and philanthropist Bill Gates is ranked the fourth-richest person in the world with a net worth of $143 billion.

Mark Zuckerberg, chief executive of Meta Platforms, formerly known as Facebook, has added $13.8 billion to his net worth since the start of the year and has moved up one spot to be the world's fifth-richest person with a fortune of $142 billion, according to the Bloomberg data.

Updated: January 26, 2024, 7:51 AM